Backlog of 3,500 financial complaints

THE economic downturn has caused a large increase in complaints against banks, building societies and other financial institutions with a record number of cases being handled by the Financial Services Ombudsman (FSO).

The Ombudsman, Bill Prasifka, revealed yesterday that his office is dealing with a backlog of almost 3,500 complaints which have built up over the past two years in tandem with the country’s financial crisis.

Mr Prasifka said the FSO had received 3,600 complaints alone during the first six months of 2010. He pointed out that there had been a noticeable increase in the level of complaints since the beginning of the economic downturn.

However, Mr Prasifka told RTÉ’s Prime Time that while the backlog was not increasing, his office only had resources to deal with “pre-crisis” levels of complaints with no increase in the FSO’s annual budget.

The FSO, which is staffed by about 30 people, handles complaints from individuals who feel they have been treated unfairly in their dealings with a range of financial service providers including banks, insurance companies, credit unions, brokers, moneylenders, bureaux de change and hire purchase providers. However, it does not cover accountants, solicitors and other investment advisors.

Under legislation, the ombudsman can award compensation of up to €250,000 where a complaint is upheld.

Mr Prasifka acknowledged some complaints were not processed because investment products had simply not performed. However, he stressed there were also cases where people had been sold unsuitable products.

Since people have experienced difficulties with their personal finances and the collapse of the property market, the FSO has recorded an increase in complaints relating to breakage fees imposed by banks on borrowers wanting to switch from fixed to variable interest rates as well as complaints against financial institutions trying to force customers to switch from loss-making tracker mortgages.

The FSO received a total of 7,619 complaints in 2009 — a 28% increase on the previous year’s total. Of cases which required adjudication, approximately 60% were resolved in favour of the complainant.

FSO Lo Call: 1890 88 20 90 or www.financialombudsman.ie